Compliance & Regulation

Retired Boca Raton Nurse Sues Broker Following Losses in Retirement Savings

Alleges Broker’s unsuitable recommendation put her “in harm’s way”

FT. LAUDERDALE, Fla., Aug. 31, 2016 /PRNewswire/ — The law firm of Securities Fraud Attorney Mark A. Tepper has filed claim against brokerage firm Southeast Investments, N.C. Inc., for allegedly placing a retired Boca Raton nurse, whose primary source of income was social security, in harm’s way.

In the claim filed with the Financial Industry Regulatory Authority (FINRA), Mr. Tepper, a former Chief Trial Counsel at the New York Attorney General’s Bureau of Investor Protection and Securities, alleges that Southeast Investments, N.C. disregarded the retiree’s stated objective of income with moderate risk, recommending instead Cornerstone Total Return Fund (NYSE: CRF), “an aggressive total return fund, focused on capital appreciation concentrated in equities.”

The claim contends that the fund’s high distribution rate was not tied to the fund’s investment income, or capital gains, and did not represent yield or investment return.

Respondent made distribution payments... which consisted primarily of the return of her own investment

Instead, the claim alleges, “Respondent made distribution payments to [the retired nurse] which consisted primarily of the return of her own investment – only a small portion was actually income.”

$1.20 to earn $1.00

“Respondent omitted material facts. Had Respondent investigated CRF, using “reasonable diligence”, it would have learned that based on the NAV premium she paid, it cost [the retired nurse] $1.20 for each $1 of capital returned by CRF,” the claim alleges.

[Southeast Investments, N.C] “either did not understand CRF or, worse, acted with intent to defraud,” the claim alleges.

Southeast Investments is headquartered in Charlotte, North Carolina.

 

 

 

About Mark A. Tepper, P.A. (www.MarkTepper.com)
Attorney Mark A. Tepper is the former Chief Trial Counsel at the New York Attorney General’s Bureau of Investor Protection and Securities. He has earned the reputation of “Investor Advocate” while practicing law for over 35 years representing individual investors. FINRA arbitrators have upheld stockbroker fraud claims filed by Mr. Tepper against many brokerage firms. A member of the Florida, New York and California Bars, Mr. Tepper is peer-reviewed for 16 consecutive years, AV PREEMINENT® for ethical standards and legal ability, the highest rating of lawyers in the Martindale-Hubbell Law Directory.